Last week’s open question was whether a heat wave might slow the steady growth in US milk output that has been weighing on prices. This week the heat actually arrived, and NFDM kept falling anyway. After a Monday spike to $1.6975, CME spot NFDM fell three straight sessions to $1.505 by Thursday, down 5.8% on the week and 34% below the early-May peak. The pressure on non-fat is coming from its own fundamentals, not the weather.
Sarina Sharp laid out why in her June 30 Daily Dairy Report on Vesper: the two processors hit by recalls earlier this year have recovered, months of high prices depressed export prospects, and output keeps climbing, with combined NDM and SMP production at 216.9 million lb in April, up 9.4% year over year and the highest monthly total since June 2023. Her conclusion: “the fundamentals suggest milk powder will be more abundant in the future, and prices will likely remain under pressure.”
Butter round-tripped, hitting $1.70 on Monday and closing at $1.6375 on Thursday. Production is strong but so is demand, stocks stay well below last year, and exports are booming alongside rising imports. As Sharp puts it, “Americans simply can’t get enough Irish butter.”
The edition also covers the July 2 Dairy Cafe conversation with Josh White of US dairy trader TC Jacoby on whey: US WPI is up 6.3% since late May while WPC80 has flattened, more offers are appearing without clearly less demand, and buyers are testing MPC85, down 16% since late May, as a substitute. White’s line on demand: “GLP-1 is a catalyst. It didn’t create this trend.”
Milk futures fell hard too, with July Class III at $15.56/cwt, below most producers’ cost of production. The full US Weekly has the charts, the whey conversation and the herd picture.
